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Growth driven by 'true multichannel approach', says House of Fraser boss

House of Fraser chief executive Nigel Oddy has attributed the jump in first half profits reported on Tuesday to a combination of online and bricks-and-mortar sales growth, as all categories saw positive like-for-likes.  

Turnover increased 6.5% year-on-year to £574.2m for the 26 weeks to August 1, while gross profit rose 5.8% to £204.7m. Online sales grew by 30.8% and now represent 17.5% of total sales, while like-for-like sales in bricks-and-mortar stores were up 2%.

Oddy said the results were down to HoF’s “true multichannel approach”.

“Growth is coming from all routes to market. We had a strong performance online, but store sales also contributed to gross profit and we are continuing to invest in our stores in the UK. All product categories were up for the half, so we are very pleased.”

Michael Kors and Ralph Lauren Polo performed well, while concessions from Dune, Kurt Geiger and Mulberry also saw an increase in sales, he said. Overall, third party brand sales were up 7% and now account for 85% of the total.

“We are continuing to look at our offer,” said Oddy. “Online there is no maximum capacity we can stock so there is potential to continue to grow the offer further. In our stores space is limited, so we need to constantly assess which ones are working and which aren’t, as well as looking at new and up-and-coming brands. We have further additions planned for 2016.”

The company’s first department store in China will open in autumn next year. It has already signed up “a number” of UK and local brands, Oddy said, but he refused to name them.

During the half House of Fraser refurbished stores in Huddersfield and Lincoln and is updating its shops in the Intu MetroCentre in Gateshead, the City of London, Bluewater shopping centre in Kent and Leeds city centre before Christmas. It will open a new 100,000 sq ft store in Rushden Lakes in Northamptonshire in 2017.

Oddy said HoF is “confident” for the key Christmas trading season: “August was challenging, but we have bounced back well in recent weeks. The reaction to autumn product has been good.

“Christmas will be Christmas. All we know for sure is that it will arrive on December 25, but we are in a good position, with a great offer and we are feeling confident.”

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